The Supreme Courts recent judgment on the liability of personal guarantors when a company undergoes insolvency is a cautionary call to guarantors treading dangerous waters that will surely stir up a storm.
A discussion on the effect of personal guarantees on a business debtor facing bankruptcy under the Insolvency and Bankruptcy Code, 2016 brings up several legal questions.
A personal guarantee is a promise made by an individual (the guarantor) to pay back a debt if the corporate debtor (the borrower) defaults on its obligations to a creditor.
The total claims accruing from matters where the admitted claim breaches the 1,000 crore mark add up to a massive 8.78 lakh crore, as per the quarterly report of the Insolvency and Bankruptcy Boar…
Read the full article at: https://theleaflet.in/what-is-the-debate-on-personal-guarantors-in-insolvency-proceedings/